RBA Chief Says Australia Capable Of Stronger Growth

"It is important that we have a sharp focus on the reforms that can make a real difference to our living standards," he said in a speech in Canberra. "If we don't do this, we will fall behind."

Lowe noted that the drivers of growth in the economy are changing. Natural resources remain the main export earner, but Australians are increasingly employed in service industries.

Competitive advantage is increasingly built on technology and management capability and the economy need to capitalize on it, the banker said.

"The central ingredient lies in investment in human capital. If we are to grow strongly in the future, then that growth will be built just as much on the quality of our ideas as it is on the quality of our natural resources," Lowe said.

The banker observed that average growth in per capita incomes over the next quarter of a century will be lower than over the past quarter of a century.